7-Eleven wage scandal highlights need for tougher laws on franchisors

The systematic wage exploitation of 7-Eleven workers around Australia has highlighted the need for law reform to hold franchisors responsible for their franchisees’ mistreatment of workers, according to employment law experts Maurice Blackburn.

In a written submission to the Senate committee inquiry into Australia’s temporary work visa programs, Maurice Blackburn said too often small businesses and franchises under investigation for wage abuse of their workers simply stopped trading to avoid liability.

The law firm, which is acting pro-bono for 7-Eleven workers caught up in the wage scandal, said stronger laws were needed to prevent these operators from effectively “phoenixing” themselves, and to ensure franchisors were held ultimately responsible for any misconduct.

“It is our view that the Fair Work Act does not go far enough in holding franchisors responsible for breaches by their franchisees when it comes to protecting vulnerable workers,” said Maurice Blackburn principal Giri Sivaraman.

“In the case of 7-Eleven, potentially thousands of workers have been underpaid millions of dollars by rogue franchise operators, with head office turning a blind eye to the exploitation until it was exposed publicly.

“Tougher protections are needed to deter and prevent similar exploitation by other companies, including laws that will help workers overcome the legal hurdles they face when franchise operators stop trading.”

Mr Sivaraman said a proposed bill by Greens MP Adam Bandt that would make franchisors responsible for their franchisees underpayment would be a good start.

Maurice Blackburn Lawyers represents former 7-Eleven workers including Pranay Alawala and Mohamed Thodi, who will appear at a public hearing of the inquiry in Melbourne today.

Mr Sivaraman, who will also attend the hearing, said the wage abuse of overseas workers was not limited to 7-Eleven, and urged the Committee to broaden the scope of its inquiry.

“The workers we have spoken to say that workers at other large chain franchises, including fast-food, fuel and convenience outlets, are also suffering from similar exploitation and we believe the Committee also needs to examine this.”

Maurice Blackburn is providing free legal advice for any 7-Eleven worker who wants support to lodge a claim for underpayment of wages. Workers can get in touch through the Maurice Blackburn hotline 1800 243 766.